Centuria in chase for Sydney tower

Property fund manager Centuria Capital is looking to buy a Stockland office tower in the mid-town precinct of Sydney’s central business district for about $55 million.

The active Centuria is thought to be finalising the purchase of 175 Castlereagh Street after a lengthy campaign by Stockland to sell the asset.

The group is slowly selling its office and industrial holdings to focus on its 3R strategy.

Stockland and Colliers International, which marketed the property, declined to comment.

The 17-level building has 13 levels of commercial office space and four levels of underground parking.

Stockland has owned the tower near its head office since 1982. It was valued in December 2009 at $53 million on a capitalisation rate of 8.75 per cent and Stockland holds it at $54.9 million.

It spans a net lettable area of 11,942 sq m and had a weighted average lease expiry of 1.7 years at the end of December 2011.

Centuria last year bid for property fund management rights totalling $2.5 billion but none of them came to fruition. The group said in February it would continue to engage in this market until it “successfully achieves growth in this manner".

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Centuria’s property funds unit is one of the few active players in the unlisted property space and it has ambitions of growing to manage $3 billion of funds while many of its prospective rivals are on the sidelines.

Centuria manages 48 properties in 29 funds with a combined value of more than $1 billion.

In March, it bought an asset on Melbourne’s St Kilda Road for $58 million on behalf of the Over Fifty Guardian Friendly Society.

The group this month flagged plans to undertake a total of $700 million of development across its networks of funds. Some office buildings would be converted into apartments but these are a relatively small part of the group’s holdings.

Centuria chief executive Jason Hujlich said yesterday the group looked at lot of properties but would not comment on Castlereagh Street.